David Davis admits UK and EU have "significant differences" over a Brexit bill

Brexit negotiations were proving “tough and at times confrontational”, David Davis admitted today as he told MPs there was a yawning gap in how the two sides saw the UK’s divorce bill.

“There were significant differences” and “very different legal stances” over how much the UK owed, the Brexit Secretary told MPs, leaving open the very real possibility of talks failing to move on to a future trade deal.

Mr Davis was updating MPs in the House of Commons on last week’s round of talks with European Commission negotiator Michel Barnier’s team.

He claimed the UK side had surprised EU negotiators by going through their financial demands “line by line”, saying that, while the UK would honour its financial commitments to the EU, the latter was trying to use the increasingly tight timetable for concluding talks to bounce Britain into a deal.

Shadow Brexit Secretary Sir Keir Starmer said that “fantasy was meeting brutal reality” in the talks.

Any hold-up over how much the UK must pay to leave will increase the chances of it crashing out of the Union without any deal on future trade arrangements – something which appeared to delight some Tory backbenchers, one of whom shouted “good” when the possibility was raised by Sir Keir.

The EU has made clear that talks on any future deal would begin only once enough progress has been made on the UK’s initial divorce bill.

The UK Government has said that it is prepared to “intensify” talks, currently held on a one-week-a-month basis, to a more constant, rolling schedule. But EU officials have warned over the progress of negotiations as they are, saying the UK must “start negotiating seriously”.

Updating MPs on last week’s round of talks, Mr Davis insisted that “concrete progress” had been made on issues such as the rights of UK citizens living in the EU to access healthcare, and on the Irish border issue.

But he admitted the Brexit bill was proving a sticking point, saying: “Does Labour want to pay £100bn to get progress in the next month? I hope not. We will do this in the proper way.”

The Brexit Secretary provoked mirth from the Labour benches when he said: “Nobody ever pretended this would be simple or easy.”

Sir Keir was quick to remind him that International Trade Secretary Liam Fox had said just six weeks ago that “the free trade agreement that we will have to come with the European Union should be one of the easiest in human history”.

He said that the EU and UK “appeared to be getting further apart, rather than closer together”, adding: “The truth is too many promises have been made about Brexit which can’t be kept.”

Father of the House and prominent Remainer Ken Clarke called for the Government to remain in the single market and customs union during any transition period, a position recently adopted by Labour. But Mr Davis said any “implementation period” would have separate but parallel arrangements.

The next round of talks are due to begin on September 18, with phase one due to conclude on October 9 and EU leaders meeting 10 days later to decide if enough progress has been made for trade talks to begin.